Can Stocks Be Traded on More Than One Exchange?

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A institution tin database its shares connected much than 1 exchange, which is often referred to arsenic a dual listing. A banal tin waste and acquisition connected immoderate speech successful which it is listed. However, companies must meet each of nan exchange's listing requirements and salary for immoderate associated fees successful bid to beryllium listed.

Key Takeaways

  • A institution tin database its shares connected much than 1 exchange, which is referred to arsenic dual listing. 
  • In bid to beryllium listed, a banal must meet each of nan exchange's listing requirements and salary for each associated fees.
  • A institution mightiness database its shares connected respective exchanges to boost nan stock's liquidity.
  • Multinational corporations mightiness database connected aggregate exchanges, including their home speech and nan awesome ones successful different countries.

Understanding Why Stocks Trade connected Multiple Exchanges

Although companies tin database their stocks connected aggregate exchanges, very fewer companies really do it. Companies specified arsenic Charles Schwab (SCHW) and Walgreens Boots Alliance (WBA—formerly known arsenic Walgreens—previously experimented pinch being dual-listed connected nan NYSE and NASDAQ, but person since returned to being listed only connected a azygous exchange.

Liquidity

One logic for listing connected respective exchanges is that it increases a stock's liquidity, which intends that location are plentifulness of shares disposable for marketplace demand. A dual listing allows investors to take from respective different markets successful which to bargain aliases waste shares of nan company.

A stock's liquidity tin beryllium measured by nan bid-ask spread, which is nan magnitude by which nan trading price, called nan inquire price, exceeds nan bargain price, called nan bid price. The accrued liquidity for stocks connected aggregate exchanges makes nan stock's bid-ask dispersed decrease, making it easier for investors to bargain and waste nan information astatine immoderate time.

Multinationals

Multinational corporations besides thin to database connected much than 1 exchange. These companies whitethorn database their shares connected some their home speech and nan awesome ones successful different countries. For example, nan multinational corp BP (BP)—formerly British Petroleum—trades connected nan London Stock Exchange and nan New York Stock Exchange (NYSE).

Listing connected Exchanges Through Depositary Receipts

The fame of depositary receipts has accrued nan number of companies trading connected exchanges successful different countries. A depositary receipt (DR) is simply a negotiable certificate that represents equity shares successful a overseas institution that's traded connected an world banal exchange.

Depositary receipts are adjuvant to investors since they let nan acquisition of equity shares of overseas companies without trading straight connected a overseas market. In different words, companies tin database their shares connected their section speech and besides done a depository receipt successful different marketplace truthful that overseas investors person access. A depositary receipt tin beryllium issued connected a overseas speech by nan slope holding nan shares pinch aliases without nan endorsement of nan institution being traded.

Investors successful nan U.S. tin entree overseas stocks done American depositary receipts (ADRs). An ADR is denominated successful U.S. dollars whereby a U.S. financial institution overseas holds nan shares. ADRs are a awesome measurement to bargain shares successful a overseas institution while earning capital gains on nan finance and dividend income—or rate payments by companies to their shareholders.

Depositary receipts let investors astir nan world to acquisition and waste ample world companies' stock. An illustration of a well-known institution pinch a heavy traded depositary receipt trading connected nan NASDAQ is nan Chinese exertion giant, Baidu (BIDU).

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